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Choosing a Listing Price

Picking a Listing Price can be extremely stressful, what you think your home is worth might not be what the Market thinks your home is worth. A Real Estate Agent will give you their expert opinion, but make sure they explain the current market trends and have enough information to back it up.

Dangers of Overpricing

Broker- and buyer-interest is at its highest when a home is first put on the market — and that interest will remain high for about four weeks. But if a property is priced too high during this crucial period, it won’t attract the right buyers. Once that momentum is lost, it’s difficult to recover.

• By overpricing your home, you create the need to reduce the price at a later time in order to compete with the listings that are really in your price range.
• If you’re interviewing several Realtors to choose a listing agent, you may be tempted to pick the sales professional who suggests the highest price for your property. But sellers, like buyers, need to beware. The Realtor who provides the best comparative market analysis and explanation of how your home should be priced will be more likely to sell your home quicker and for a higher price than someone who tells you only what you want to hear.

Look at Comps

Talk to a Realtor and have them find Comparable homes,that are on the market and homes that have recently sold, also known as a Comparative Market Analysis . Your asking price should be within 10 percent of the average sold price in your neighborhood.

Realtors will evaluate three factors: comparing your home to others that have recently sold, others currently listed and adjustments needed for extraordinary improvements.

Although home improvements can increase the value of your property, it is more likely these upgrades will simply help the home to sell faster than the others without similar renovations. This concept is sometimes difficult for sellers to understand. They feel that if they spent a certain amount on a home improvement, they should be able to recoup that cost by tacking it on to the sales price. But unfortunately, that’s not always the case. According to Home Remodeling Magazine, very few home improvements return 100% of the investment, and that percentage of return declines as the years go by.

Upgrades are important, but buyers may not share the owners’ enthusiasm for — nor agree with — the owners’ perceived value of the improvements. And if a buyer doesn’t see the value, then there is no value.

A professional analysis of the market, will take all of this into consideration as well as analyze the price other homes have actually sold for, not just the asking price — there can be a sizable difference. The most common mistake sellers make when pricing their property is to only consider the asking prices of other properties. Remember, a list price does not suggest market value of a home. It is simply the “asking price” or “dream sheet” of another seller. Its relevance may, however, be in how you position your home with the others on the market.

Other Factors:

• Time of year — Ah, spring. Spring is considered the best season to sell a home since families are trying to get situated before the start of the next school year; however, fall is a close second since it comes right after the quiet days of summer when most people are away on vacation. Winter is usually the worst season — especially in areas where it snows — but also because of the Thanksgiving, Christmas, and New Year’s holidays when people’s minds are on socializing, not buying or selling a home.
• Interest rates — If rates are reasonable, it seems everyone is in the market for a home. But, if interest rates start to climb or they do not seem reasonable, you’ll see less action on the street.
• Inventory — In Economics 101, we were taught the basics of supply and demand. This theory laid the foundation of what drives costs, and so it goes with real estate. If your home is one of 20 in the neighborhood that’s for sale, you will have a hard time getting your price since the supply is great and the demand may not be so great. However, if it’s a hot market and you have a home in a great neighborhood, chances are you will get your asking price and maybe even more. Scope out the neighborhood to see if inventory is high or low. (And ask a real estate agent.)

This Month in Real Estate: September

When is Disclosure too Little, too Much or Just Right?

Real estate agents walk a fine line regarding disclosure in meeting their fiduciary responsibility to their clients. The question is when is disclosure too little, too much or just right? The truth is that there are no absolute answers, just common sense practices that an agent can follow to best serve their client and protect themselves.

We recently took a look at the C.L.U.E. report which has been available for approximately the last 8 or 9 years. Re-Insider finds this report to be a great example of the variety of information that can find its way into today’s real estate transactions.

The first question that should always be looked at when vetting disclosure information is, is there a legal requirement in the California Civil Code for a particular disclosure of information? If there is, for example the NHDS or TDS in most residential transfers, then it has to be in the disclosure information to the buyer.

But what about non legally required reports, C.L.U.E. being a good example? In the case of C.L.U.E. reports being provided, this grew simply from CAR adding a question to their SSD form which was then incorporated into the SPQ on page one. This is a form that has grown over the years to 10 questions in which a seller is advised, by CAR, to disclose to a prospective buyer of their residential property. The question on the CAR SPQ regarding insurance claims is simply “Insurance claims affecting the property in the last five years”— answer to be given as simply yes or no.

So how did the additional information contained in a C.L.U.E. report, not requested or required, come into use and does it potentially pose a liability to the agent? The quick answer to the first question for coming into use is money. What was once a simple yes or no answer from the seller is now a $19 + report that companies make money selling into the transaction.

As far as the question of liability to the agent, if the additional information in the C.L.U.E. report has a mistake in it, as happens from time to time and causes some of the problems discussed in the previous article, then who takes responsibility? The most common response from agents is the company that sold the report to me of course. But as it turns out this is not necessarily the case.

Why you ask? The C.L.U.E. report comes with no guarantee or indemnification from LexisNexus, the company that produces the report. The resellers, usually disclosure companies, all have a third party exclusion in their limits of liability that state they are not responsible for mistakes in information provided to them from outside sources.

This can leave the real estate agent or brokerage financially responsible for the C.L.U.E. report if there is a problem. The message in this for agents, using C.L.U.E. reports in this case, is to look at your disclosure procedures with an eye towards not only meeting your fiduciary duties to your clients, but managing your own risk. With that in mind, with the case of C.L.U.E. reports the best answer may be to use the CAR SSD form.

What do you think of this situation? Are you in favor of regulating disclosure companies?

 

RE Insider read more here:

http://re-insider.com/2014/07/23/when-is-disclosure-too-little-too-much-or-just-right/

High-End Home Sales Soar throughout California

By RE INSIDER

While home sales throughout much of California have remained flat throughout this spring and early summer, a new study has indicated that multimillion dollar homes are selling in record numbers, offering hope that the market is still improving and prompting many to wonder what’s holding the rest of the market back.

According to a recent study performed by San Diego-based DataQuick, $1 million-plus sales grew at a 9.1% clip statewide compared with last year, while sales overall fell 7.4%. Additionally, California in the second quarter set all-time records for the number of homes sold for more than $2 million, more than $3 million, more than $4 million and more than $5 million.

What’s driving these high-end home sales? According to market-watchers, there are several factors.

One is the hot technology sector in the Bay Area and some affluent parts of Southern California, which is minting new millionaires who can afford seven-figure homes. Another is the 11.6% price growth in California over the last year, which means a house worth $925,000 last summer may be worth $1.03 million today. And there’s the influx of international buyers, which is pushing up prices at the high end.

“It’s always fascinating to watch this part of the real estate market. It behaves differently, responds to its own set of criteria,” said DataQuick analyst Andrew LePage. “These buyers, especially those in the multi-million-dollar market, are less likely to agonize over credit scores, income and job security, down payments and mortgage interest rates.”

With this in mind, do you think this the market is improving as a whole? And considering that mortgage rates remain historically low, what do you believe is holding other buyers back?

READ MORE HERE

http://re-insider.com/2014/08/18/high-end-home-sales-soar-throughout-california/